Oval Chalet – Grounds of Challenge

See below for the grounds submitted for the oral hearing on 8th June when our request for permission for the claim to be granted to proceed to the substantive hearing was heard.

6 Grounds of ChallengeGround 1: Open Space Status
105. The Oval is open space and, as such, the Council was under a statutory duty
to advertise its intention to dispose of the land pursuant to section 123 (2A) of
the LGA 1972. The Council’s predecessor acquired and held the Oval
pursuant to an undertaking which it gave to the previous owner to develop
the land as open space. All of the other circumstances surrounding the
acquisition, holding and use of the Oval are only consistent with open space
status. Moreover, the Oval has been at all times used for the purposes of
public recreation, and continues to be so used to this day. It has not been
appropriated to any other use.
106. The Council has confirmed that it did not consider the need to undertake the
requirements set out in section 123 (2A) of the LGA 1972. As noted above, the
Council refused to consider this duty because it followed the erroneous
officer advice in September 2015 from the Head of Legal & Democratic
Services, referred to at paragraph 59 above, that the duty did not arise “from adue process point of view, as the site was not an asset of community value there wasno requirement for the public to have been consulted with prior to the sale”[CB/2/278]. The fact that the Oval is not an Asset of Community Value under
the Localism Act 2011 is irrelevant to the statutory advertisement
requirements of LGA 1972, which should have been undertaken in light of
the Oval’s status as open space.
107. Similarly, the Council have proceeded on the basis, flying in the face of the
chronology of facts set out in these grounds and the evidence submitted with
this claim, that the open space disposal advertisement requirements were not
necessary because there was no covenant in the conveyance of the Oval to
WUDC to keep the Oval as open space. Again, this advice is legally flawed
and incomplete. Because the Oval is open space the requirements of section
123 (2A) LGA 1972 must be carried out regardless of any private law rights in
favour of the seller that may be contained in the conveyance documents
attaching to the land. The absence of any such rights is evidence only that no
such rights were requested and/or granted; it has no negative probative
value in terms of whether the land conveyed is open space in terms of the
buyer’s statutory powers to acquire and hold land.
108. As the case law, especially Pepper confirms, the purported disposal of open
space land without the performance of the requirements contained in section
123 (2A) of the LGA 1972 amounts to a serious public law breach which
would be subject to judicial review challenge. That is exactly what has
happened in this case. The Council did not even consider the need to comply
with the sub-section and in the process it denied the public’s rights to be
consulted and to be afforded the opportunity to make representations
objecting to the proposed Contract if necessary.
109. The Council has therefore acted unlawfully and permission to judicially
review the Contract should be granted on this ground alone.Ground 2: Contract Outside the Authority of the Resolution
110. It is clear even from the available documents, including those published in
redacted form, that the Council proceeded to enter into the Contract pursuant
to the Resolution, which was made based on misleading information about
the site, the nature of the IP’s proposal and what it involved.
111. Firstly, the Executive proceeded to make the Resolution clearly on the basis of
representations in the DR Report that the IP was planning to include a“significant public realm element” to meet the “early aspiration for some open spacewithin the development”. As we have seen the DR Report continued to state
categorically that “Indeed the developer is keen to provide [open space and access
to the sea front] – and enter into a legal agreement with the Council in that respect”[CB/2/249] and, as referred to above at paragraph 46, the DR Report
contained an explicit commitment to the execution of such an agreement.
112. These promises were not contained in the Contract, as the Council only
admitted in the CEO Review Report. It had previously on 1 July 2015 in a
belated response to an FOI request made by Mr Graham Cox on behalf of the
Claimant on 24 April 2015 implied with certainty that part of the Contract
dealt with open space [CB/3/361]. This is now known from the CEO Review
Report to have been highly misleading. Nor are the promises referred to
above reflected in the IP’s planning proposals. No “legal agreement” has
been entered into in respect of that aspect of the proposals whether within or
outside the Contract. The Executive therefore made the Resolution to enter
into the Contract on a misled basis. The Contract, absent a binding
requirement for open space provision to be guaranteed by “legal agreement”,
was not authorised by the Resolution.
113. Secondly, the Resolution authorised a sale of the land on the terms set out in
the DR Report, as described in paragraph 46 above. Paragraph 1 of the DR
Report identified “the land” as the Oval, and the access strip to Sea Street was
clearly excluded (see paragraph 48 above). The Contract, however, included
the access strip with no authority to do so.
114. The Council acted outside the scope of authority provided by the Resolution
to enter into the Contract. The Contract was therefore unlawful and
permission to bring this claim for judicial review should be granted on this
ground alone.Ground 3: Excessive Secrecy of Resolution-making Meeting
115. The Resolution in any event was made pursuant to an unlawful breach of the
requirement in section 100B (4) (a) of the LGA 1972 to state the business of a
council, even when private, on the agenda in advance of the meeting.
116. In fact, the Council misrepresented the nature of the business to be concluded
at both the Overview Committee on 4 December 2014 and the Executive on 11
December 2014. In neither case were the key words, “disposal”, “sale” or
“contract for sale” of the land used. As a result, the Contract was entered into
without any public awareness of the issue being considered.
117. Taken in isolation in circumstances where the Council had otherwise been
scrupulously fair in complying with its duties in other respects, this breach
may have been forgivable, though still unlawful. In the circumstances of this
case, however, it is another unlawful act, evidence of which should be
enough to grant permission to proceed with this application for judicial
review.Ground 4: Failure to obtain Best Consideration
118. The CEO’s Review Report states that the sale was at best value, and this is
indeed the only way that the report of December 2014 (so far as published)
can be read, consistently with the reported advice in 2014 from Urban
Delivery. The brief and other information given to Urban Delivery for its
valuation exercise has not been released despite requests from the Claimant
and councillors, although this is of no real relevance to the Resolution in any
event because there is no evidence whatsoever that that brief was before the
Executive when it made the Resolution.
119. The Claimant obtained professional valuation advice on 30 November 2015
which establishes that the value advised to the Council’s Executive was so
wide of the mark as to be irrational [CB/2/334-338]. This is a Red Book
Conflict Valuation from the Canterbury office of BTF (qualified Royal
Institution of Chartered Surveyors registered). BTF’s valuation is on the basis
that the whole title is being sold including the access strip even though this is
not consistent with the Resolution. It is on this basis because this is the subject
matter of the Contract. Either the Contract is wrong in including the access
strip, or the sale price is wrong because the access strip is included. The
Council cannot have it both ways.
120. Based on the CEO Review Report that £600,000+ would be the magnitude of
any damage that might be claimed by the IP pre-planning permission if the
transaction did not proceed, there is a likelihood that the contract price was
substantially below best value. Further, in the CEO Review Report, at
paragraph 1 [CB/2/284], the CEO contends that the “undervalue sale” was
“authorised” by the General Disposal Consents 2003 (“the GDC”). This
confuses the issue. The Resolution was (purportedly) on the basis that best
value was being obtained, as the DR Report made clear. The Resolution thus
endorsed this (although the Claimant contends this was wrong in fact). The
CEO cannot now claim that the sale was at an undervalue and thus
authorised by the Secretary of State under section 123 (2) LGA 1972 since the
sale must stand or fall on the basis put in the DR Report. Ex post facto
recategorisation of a purported best value sale as an “undervalue” one will
not do. There is no knowing whether if the Executive had been presented
with an undervalue sale, it would have agreed to it. Even if the GDC had
been invoked in the DR Report, it is a condition thereof that for a decision to
sell at undervalue to be covered by the GDC, the decision-making body has
to identify that the sale is made at undervalue and identify the social,
economic and/or environmental, benefits that justify the price being below
the value – see paragraph 2 (a) GDC. No such statement was made in the
Executive’s Resolution of 11 December 2014. Therefore the GDC cannot be
prayed in aid in any event by the Council.
121. Further, since the Contract does not include any requirement to secure the
public open space, any ‘best value’ considerations, which depended on the
assumption that public open space would be secured, would be legally
invalid as relying on immaterial and/or incomplete information. Put shortly,
the failure to secure any public open space as a term of the Contract has had
the effect of increasing the value of the Contract to the IP as it freed up
additional development land. It follows that greater consideration should
have been paid to the Council and the Resolution to approve the contract was
unlawful.
122. In its pre-action response, the Council appears to accept that it may have been
in breach of the best value requirements of section 123 (2A) of the LGA 1972
and the GDC. It claims such matters do not go to the heart of the Contract.
However, if the Council have acted in breach of the ‘best value’ requirements
then this is also unlawful and permission to apply for judicial review should
be granted on this ground. Furthermore, an Order for disclosure of all
evidence relating to the valuation of the Oval, the consideration for its
disposal and whether this was ‘best value is needed to resolve this matter
expeditiously, and is justified in the circumstances.Ground 5: Breach of the Public Sector Equality Duty
123. The Council has not had due regard to its public sector equality duty in this
case as regards the qualifying characteristic of disability. There was no
Equality Impact Assessment undertaken in relation to disabled people
pursuant to section 149 of the EA 2010.
124. The public open space in the development scheme proposed by the IP, which
was verbally described to the decision-making Executive, would be accessible
only up a narrow flight of stairs and hence would not be available to disabled
people who would thus be excluded from using it, a material disadvantage.
This means that the statement in the report “Equality Impact assessment: Noadverse implications are envisaged” was plainly wrong and could not fulfil the
Council’s obligations under the Act.
125. For similar reasons, the RPC’s decisions in September and October 2015 not
to take any further action, despite being informed that the public open space
would not be secured by the sale, was likewise in breach of the Act. The CEO
Report simply contained no assessment whatsoever of the implications of his
finding, and his advice to do nothing, for protected groups.
126. Once again, the Council in their pre-action letter appear to acknowledge that
it may have made a “failure of process” but that “this would not invalidate thecontract” [CB/6/400-405]. The attitude of this Council to its potential unlawful
acts is telling. However, again, if the Council have acted unlawfully then
permission to bring this claim should be granted.